Real Estate & COVID-19
By SCOTT MOORE, REALTOR
June 4, 2020There is no doubt that the number one topic of 2020 has been COVID-19, so I’m sure you're curious about how the real estate market has been doing during these times.
Overall, sales in Winnipeg were down by 30% in April compared with the year prior, but for The Moore Group, business actually increased—we sold 24 homes this April compared with 20 in April 2019.
With 42% fewer homes listed in April 2020 compared with April 2019—there was way less inventory. With less inventory, homes that were for sale were in hot demand and selling for more money, faster. In fact, 20% of the sales in April 2020 were for over list price.
For those of you that were on total lockdown at home, it probably seems hard to imagine how people were seeing homes, but there were still buyers that had already sold their homes and needed somewhere to move, people going crazy at home and needing more space, people relocating for work, etc.
Many buyers had good reason to move quickly—with interest rates at their lowest, many of our buyers were “reapproved” and found that their purchasing power was considerably higher than it was at their initial pre-approval.
The Manitoba Real Estate Association put in place a number of protocols to help keep buyers, sellers and realtors safe—things like no extra people at showings, lights left on so no need to touch the switches, no open houses, and keeping track of the people that had been in homes in case of a future COVID-19 case and contact tracing became necessary.
One of the first things we noticed was that buyers were doing way more online research—really examining the video tours and pictures, looking at homes on Google earth, doing a drive-by to check out the street and location—using all the available tools to be sure that a home was a really good contender before seeing it in person.
From a sales perspective, this isn’t 100% what we want—sometimes when people pull up to a home they notice something they don’t like, but then they go into the home and find something they really like—and the initial turn-off gets set aside, or seems less important.
Of course, if the initial turn-off means the home is crossed off the list permanently, then there’s no chance the buyer will find the silver lining. But given that our first goal was keeping everyone safe, we were totally on board.
We have always used very high quality professional photo and video on all our listings, so when suddenly faced with a pandemic when 99% of the sale was happening via the images, we weren’t caught off guard with inadequate photography, which is one of the reasons our business actually improved—our listings were easy to see online, which made them easy to buy.
We also did a number of virtual tours where our agents would go into a home solo and do a live video tour with the buyers who were elsewhere. We actually sold two homes in April to people who only saw the home via Facetime!
But how about pricing? Of course that is top of mind for homeowners nervous about their investment. The jury still really is out on what the long term impact on pricing will be, but if anything we have seen increased demand so far.
I can say that so far we haven’t seen any crazy “deals” yet in Bridgwater or in the wider Winnipeg market—sellers are not discounting their properties any more than normal, there are no fire sales, and the low-ball offers are still getting rejected. Remember that at these higher price points people are often only putting 5% down, and to sell at a loss means they have to get a loan to cover the difference—most people will rent, borrow, or wait before doing that.
The best “deal” for a buyer right now really is on the interest rates—that is something to jump on. But time will tell on what happens with pricing this year, and obviously we are keeping a really close eye on that.
The bottom line is that these are not normal times in real estate. Winnipeg’s real estate market has historically weathered ups & downs that produced massive volatility in other provinces yet little more than a blip here, so there is good reason to think that we should be able to weather this too. I think the fact that our COVID-19 cases are so much lower here in Manitoba compared with the other provinces should bode also bode well for us too.
Nonetheless, there is no doubt that this is a sensitive market right now, and if you are contemplating a change in your personal real estate, I can’t stress enough how critical it is to have an experienced realtor with significant local expertise to get you through the transaction as smoothly as possible. It is absolutely still possible to be profitable in the current market, it just takes a little bit more skill and expertise.